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Is Business Travel Obsolete?
Power Trip · August 1, 2002

Business travel, as we know it, is obsolete. Fed up with high prices and feeling the pinch of a contracting economy, road warriors stopped buying expensive trips last year. The effect on the travel industry was nothing short of catastrophic. Airlines lost more than $7 billion in 2001, even though planes were flying at capacity levels, according to the Air Transport Association, a trade group.

Some business travelers have stopped buying altogether. Here's why.

The Sept. 11 effect. Let's start with the obvious. People don't like to travel a lot because they're afraid they could die in another terrorist attack. "It's unreasonable to expect an employee to travel after Sept. 11," says Scott Baade, a Highland Ranch, Colo., traveler.

The hassle factor. Long waiting times at the airport are deterring many would-be travelers from booking a trip. Delta Air Lines' chief executive, Leo Mullin, recently blamed the "hassle factor" on a 28% revenue decline for the airlines' shuttle.

The technology alternative. I'm not going to say that companies offering teleconferencing, video conferencing and Web conferencing have exploited the post 9/11 mood among business travelers. But they've certainly been the beneficiaries of it. Why travel, they argue, when you can get business done from your office? Why, indeed.

The remaining road warriors are embracing a "new" business travel that throws out most of the conventions we're accustomed to, redefining our expectations and revising our priorities. Here's a look at the old and new.

Old: inflexible. Traditional road warriors paid a premium for being able to travel anywhere at a moment's notice. Airlines, hotels and car rental companies jacked up their prices for the privilege and used the extra money to subsidize lower-cost tickets. Companies footed outrageous travel bills and wrote it off as the cost of doing business.

New: flexible. New road warriors make their plans around airline schedules. They aren't concerned about staying over a Saturday night in order to save their company money. They're essentially benefiting from the subsidization of leisure-travel prices. If they have to travel at the last minute, they bid on an airline ticket or hotel room and take their chances.

Old: agent-based. Business travelers used a traditional travel agency which booked trips and earned a commission from one of the travel suppliers. Often, these agencies had access to special negotiated prices, which travel companies offered in exchange for volume commitments.

New: Web-based. Now that airlines and car rental companies have eliminated most agency commissions and moved their most desirable inventory to the Internet, business travelers are following them there. Agencies have begun charging hefty service fees to make up for lost revenue, which just isn't worth it for many small businesses.

Old: status-conscious. During the go-go days of the late 1990s, business travelers could reasonably expect the lavish perks that came with their elite frequent-flier status, such as airline club memberships and generous upgrades to first class. Airlines outdid each other in their attempts to create more luxurious premium seating and hotels competed to design better concierge floors.

New: price-conscious. Perks are still in high demand — but only if the price is right. Travelers are looking for rock-bottom rates, first and foremost. In a recent survey by the National Business Travel Association, more than two-thirds of all corporate travel managers said trimming travel costs was "a priority." More than half of those polled said they'd already implemented cost-cutting measures.

Here's how you can take advantage

The evolution of the "new" business travel, combined with the fact that many employees just don't want to hit the road at all, presents an opportunity for those of us who can see past this trend. Here's why.

Prices are low. In 2001, overall ticket prices dropped 8%, according the Air Transport Association. And they've kept falling through the middle of 2002. You'll save your company lots of money by planning a trip while fares are reasonable.

The bonuses are better. Travel companies are so grateful to have a card-carrying frequent traveler as a customer that they're being extra generous with upgrades and mileage awards. Many airlines believe the key to their survival is in bringing "old" business travel back, and they're pulling out all the stops to do so.

It's easier. This is certainly a contrarian thing to say, given that the new Transportation Security Administration is setting up Checkpoint Charlie in every U.S. airport. But think about it: With many business travelers sitting on the sidelines, flights, hotel rooms and cars that are traditionally preferred by road warriors (red-eye flights, concierge-floor rooms, full-sized cars) are practically empty.

Business travel as we once knew it may be passé, but the evolution of the "new" business travel is offering opportunities you can take advantage of. By not following the herd, you'll pay less for your trip, travel better and get business done.

Christopher Elliott is a travel commentator based in Key Largo, Fla. All e-mailed questions may be edited, condensed or republished at the site's discretion.